Japan enters where China is barred â€“ northeast India - The Economic Times NEW DELHI: Japan is sailing in where China fears to tread. As India and Japan ramp up their bilateral relationship, India has invited Japan to invest in and build overland infrastructure in areas which are generally out of bounds for Chinese investments. India and Japan used the visit of Japanese Prime Minister Shinzo Abe to dramatically expand the scope of bilateral cooperation to include the politically sensitive northeastern states of India, areas where Chinese investment or projects are actively discouraged. Japanese companies will have the opportunity to help the development of the northeast specially to build roads, and aid agriculture, forestry and water supply and sewerage in these states. China claims Arunachal Pradesh as its territory, which has aggravated border tensions between India and China. Security agencies have also long tracked Chinese weapons assistance to militant outfits in northeastern states. It has taken India many difficult years to calm down these hills, but China remains a significant security threat. For India to invite Japan to build infrastructure here is a huge political statement. In 2007, China opposed an ADB loan for development works in Arunachal Pradesh describing it as "disputed territory". The last time the Japanese were in India's northeast was during the second world war, when they worked with Netaji Subhash Bose's INA to confront the British in Nagaland. Japanese companies have also been invited to help develop a new port in Chennai, which would be used to improve India's sea-route connectivity. India assiduously keeps China out of port development because they constitute India's critical infrastructure. Japanese assistance for Chennai port is also aimed at giving teeth to a new sea-based route that would start in Chennai, and end in Dawei port in Myanmar's Tanintharyi region. The port is being developed by Thailand. In 2012, Thai PM Yingluck Shinawatra had promised PM Manmohan Singh that Thailand would pump in a massive $50 billion into Dawei, making it a bigger investment than China's in Gwadar or Hambantota. The development of a new port in Chennai would serve to connect the industrial centres of southern and western India with southeast Asia. In addition, Japan's investment in the Bangalore-Chennai industrial corridor would find easy outlet from Chennai. In the larger strategic matrix, this would help in building an alternative supply chain network, giving Asia a viable alternative to the China-dominated networks currently in play. The India-Japan team for economic projects is ultimately placing pieces together to build a multi-polar Asia, a declared strategic intent of both countries. Japan and India have agreed to work together to develop infrastructure in other regional countries as well. This would have the double benefit of being a .. Japan and India have agreed to work together to develop infrastructure in other regional countries as well. This would have the double benefit of being a power projection for both countries in South Asia, it could be an effective counter to the Chinese juggernaut. For India, this would be an added advantage because it always falls short in delivering quality infrastructure by a moribund public sector system. An injection of Japanese funds and expertise is just what India needs. As part of the trilateral dialogue between India, US and Japan, a trilateral highway linking India, Myanmar and Thailand (the ambitious draw it further to Hanoi, Vietnam) is likely to see more Japanese and US interest. This is an India-led project due for completion in 2016, but by itself, India is unlikely to make the target. In Sri Lanka, where India is working hard to squander its hard won gains, it has invited Japan to help develop a huge thermal power plant in Trincomalee. Foreign minister Salman Khurshid recently inaugurated the project, which India has promised would be a better, cheaper power project than the one developed by the Chinese in Norachcholai. India and Japan could also jointly develop the strategically crucial oil terminals in Trincomalee. In retaliation for India voting against Sri Lanka in the human rights council, Sri Lanka has threatened to take away some of the oil terminals from India. A joint development project with Japan would solve many issues with Colombo. Buried in the agreements between India and Japan are a promise by Japan's JICA to help India's Export-Import Bank develop more attractive funding packages for Indian projects in regional countries. India always loses to China because Beijing offers finances at very attractive rates, which India cannot. India reckons that with Japanese help, it can up its own game in the neighbourhood. In the power play that is quietly underway in Asia, India has made Japan the centerpiece of its strategic outreach.